Housing shortage may hit investment by multinationals

Investment by multinationals is being put in jeopardy by the housing shortage, according to a report by the American Chamber of Commerce (ACC).

The chamber surveyed its members from a range of sectors including financial services, medical devices, pharmaceutical, and ICT, with bases in Cork, Dublin, Galway, and Limerick.

“There is clear evidence from the research process that both expanding and newly arrived companies find it particularly difficult to house their employees — including those based in Ireland and those arriving from overseas,” said the ACC. “They [the companies] also emphasised that the situation in Ireland requires more attention than in many other comparator locations.”

Its findings are contained in ‘Growing Great Teams in Ireland: The Role of the Residential Rental Sector’, a report compiled with Ronan Lyons of Trinity College Dublin.

The authors point to the recent performance of IDA client firms, which showed significant employment gains in the past five years.

“Internationally, such firms tend to cluster in city-regions in search of their talent pool — a similar practice has also been adopted for their operations in Ireland. Residential planning and development needs to match this pattern of industrial investment — such as housing, schools, transport, and utilities,” states the report.

“Particular challenges arise where there are specific skills gaps in Ireland or particular language capabilities are required by a company. New recruits, therefore, move to Ireland’s city centres from overseas.”

The report says most of those employees want to locate themselves close to workplaces.

“In many cases, they have expectations of living in a centrally based studio apartment, and are thus surprised when they arrive in a situation where they are sharing a suburban semi-detached house,” says the report.

“The often poor standard of rental properties is also a surprise for new recruits. For new hires moving to or arriving back to Ireland, other problems arise when they are unable to find accommodation. Without a fixed address, there are difficulties in opening a bank account — thus receiving wages — and in setting up utilities.”

It says consultation with member companies highlights a “clear gap” in the provision of short-term and entry-level rental accommodation, in addition to rental accommodation for senior leadership and mid-career talent.

“During the research process, it was noted that the availability of housing for specialised and leadership talent is very much a pinch point: It is not just a matter of cost, but also of sheer availability,” says the report.

The ACC said:

“It is clear that addressing these pressures in the housing sector will boost Ireland’s competitiveness to retain and attract investment and jobs.”

It said companies have resorted to measures such as advanced property viewings conducted by HR teams and allowing greater leeway for new starters to leave their place of work to view potential homes.

“This discretionary effort can only be sustained for so long,” the ACC warned.

“Controlling costs, clarifying the role of regulation, and managing the existing stock of land and dwellings will be key to ensuring that housing no longer acts as a barrier to employment growth and Ireland’s emergence as a global hub for business activity.”